Statec foresees mild growth over coming years

The Grand Duchy has largely avoided economic recession, with statistics office Statec predicting a 0.3 percent growth for 2012 due to a positive final quarter, and 1 percent for the current year.

22.05.2013

(CS) The Grand Duchy has largely avoided economic recession, with statistics office Statec predicting a 0.3 percent growth for 2012 due to a positive final quarter, and 1 percent for the current year.

By 2014, economic growth could rise to 2.3 percent, Statec found, on the condition that there are no major upsets in the local and European economic landscape. However, previous growth rates of 5 to 6 percent seem to be a thing of the past.

A source of worry is the financial sector, which has shown an “absence of dynamism” and currently offers no perspective for growth in the short-term. The industrial and construction sectors have also continued to show a negative tendency in the beginning of 2013.

Meanwhile, Statec expects unemployment in Luxembourg to reach its highest point in 2014, with the number of unemployed workers expected to finally decrease in 2015. However, this outlook depends on a fall in net migration, as well as a stabilisation of cross-border employment in the Greater Region.

Notwithstanding these factors, unemployment could remain as high as 6.5 percent until 2016.

The statistics agency also continues to see a general problem in the imbalance in the labour market, with highly-skilled jobs offered in the Grand Duchy not suitable for the majority of jobseekers in the country.

While the general outlook for the Luxembourg economy is tentatively positive, though largely dependent on developments in the European financial crisis, Statec expects public finances to remain in deficit, especially due to the loss of some 700 million euros in revenue from e-commerce taxes in 2015.

Statec also warned in its economic report that previsions were made prior to Luxembourg's change in approach to banking secrecy, a factor which will be taken into consideration for future economic outlook reports.